Holidays bring joy. They also bring bills. Every year, more Americans find themselves staring at credit card balances come January. But how many Americans actually go into debt for the holidays—and why? The numbers may surprise you.
Close-up of a note reading 'Pay debt' next to a red pen on a plaid fabric, emphasizing financial reminders.
Photo by Towfiqu barbhuiya
Holiday Debt in 2024: The Hard Numbers
Recent surveys show the scale of holiday debt in America:
- 36% of Americans took on holiday debt in 2024.
- 66% say they plan to enter debt for the holidays—up from 50% last year.
- Most people expect their holiday debt to land between $100 and $900.
- Nearly half of Americans are still paying off last year’s holiday bills.
This debt builds fast, with the average American planning to spend roughly $1,014 just on gifts. Total seasonal spending, including food, travel, and décor, can hit $1,638 or higher.
What Drives Americans to Holiday Debt?
Buying gifts isn’t the only reason people incur debt in December:
- Inflation: Higher prices make sticking to a budget tough.
- Social pressure: Nobody wants to show up empty-handed.
- Marketing and FOMO: Flash sales and social media ramp up spending temptations.
- AI-powered suggestions: Modern tech nudges buyers toward even more purchases. Nearly 65% said these suggestions influenced them.
BNPL (Buy Now, Pay Later) and credit cards are the popular funding methods. Nearly nine out of ten shoppers use credit cards; around 70% use BNPL at least once—often for clothes, electronics, or jewelry.
Who Is Most Likely to Take on Holiday Debt?
Certain groups are more likely to use debt for holiday expenses:
- Younger adults: Millennials and Gen Z tend to use credit and BNPL more.
- Higher earners: Surprisingly, those earning between $75K and $125K are increasing their holiday spending.
- Larger families: More gifts and gatherings add up.
- Frequent travelers: Those celebrating away from home often rack up travel bills.
Older adults and those with smaller incomes are more likely to cut back on spending this year. Even so, about 54% of all shoppers expect to spend as much or more than last year.
How People Are Financing Their Holiday Shopping
Credit cards are king, but BNPL offers stiff competition:
- Credit cards: Used by 88% of holiday shoppers.
- BNPL services: Used by 69% for their main purchases.
- Most shoppers combine the two, often carrying a balance into the new year.
- Typical spend financed through BNPL falls between $100 and $500.
Most people think they’ll pay off their debt within a few months. Reality often proves different, with many still paying off last year’s balance as the next holiday season rolls around.
Holiday Spending: The Impact of Inflation and Rising Prices
Inflation plays a big role in holiday debt:
- Holiday spending per person rose to $1,014 for gifts in 2024, up from $923 in 2023.
- Non-gift spending (like food and decorations) jumped 17%.
- Despite these higher numbers, real purchasing power barely increased, given that consumer prices are up by over 21% since 2020.
- Low-income households feel the pinch most, often relying on debt just to keep up.
Americans are also changing how and when they shop, with 68% preferring online shopping and 92% of all holiday gift buyers planning to shop online at least once.
How Long Does Holiday Debt Linger?
Holiday debt doesn’t disappear by spring for everyone:
- Nearly 50% of Americans are still paying off last year’s holiday debt.
- Many say it takes until the following summer or longer to pay off.
- High interest rates—often 20% or more—stretch these balances even further.
Some keep repaying last year’s gifts while buying this year’s, creating a cycle that’s tough to break.
Can Americans Break the Holiday Debt Cycle?
Breaking this cycle takes planning and honesty about what really matters:
- Set budgets before the season starts, and stick to them.
- Track spending in real-time, especially with BNPL, where payments can be easy to forget.
- Talk with family and friends about limits and expectations. A simple gift or even a shared meal can mean more than an expensive purchase.
- Look for deals, but avoid falling for every promotion or AI-suggested “must-have.”
The push to spend can feel overwhelming. But the best gifts are peace of mind and a clean slate for the new year.
Conclusion
More Americans than ever are going into debt for the holidays. They’re spending big on gifts, travel, and get-togethers, often fueled by rising prices, tech-driven shopping nudges, and social pressure. The result? January statements that linger many months past the season.
If you want to worry less in the new year, spend only what you can pay off quickly, and don’t let holiday cheer turn into a financial headache. The holidays should bring memories, not months of stress.